EXHIBIT 10.2
CONSULTING AND NONCOMPETITION AGREEMENT
This Consulting and Noncompetition Agreement (the "Agreement"), is
entered into as of March 2, 2000, by and among Savoir Technology Group, Inc., a
Delaware corporation (the "Company"), Tactful Acquisition Corp., a Delaware
corporation ("Buyer"), and P. Xxxxx Xxxxx ("Xxxxx").
W I T N E S S E T H
WHEREAS, Xxxxx and the Company have entered into a letter agreement
dated May 1, 1998 and an Executive Retention Agreement dated as of May 10, 1999
(the "Retention Agreement"), setting forth the terms and conditions of Xxxxx'x
employment as President and Chief Executive Officer of the Company, and certain
additional terms and conditions relating thereto;
WHEREAS, Avnet, Inc., a New York corporation ("Parent"), Buyer and
Company propose on the date hereof to enter into an Agreement and Plan of Merger
(the "Merger Agreement"), pursuant to which Buyer will be merged (the "Merger")
with and into Company, which will continue as the surviving corporation (the
"Surviving Corporation"), all on the terms and subject to the conditions
contained in the Merger Agreement (capitalized terms not otherwise defined
herein having the respective meanings set forth in the Merger Agreement);
WHEREAS, immediately after the Merger, the Surviving Corporation will be
a wholly-owned subsidiary of Parent; and
WHEREAS, Xxxxx is entering into this Agreement in order to induce Buyer
and Parent to enter into the Merger Agreement and to incur the obligations set
forth therein, which will result in substantial personal benefits to Xxxxx, and
all of the parties hereto acknowledge that further review and mutually agreed
adjustments of the provisions hereof (other than Section 4 hereof, which will
not be subject to alteration) may hereafter take place to more fully reflect
and clarify the intent of the parties for the benefit of the parties;
NOW THEREFORE, for and in consideration of the foregoing and the mutual
promises contained herein, and upon and subject to the terms and conditions set
forth below, the parties hereto agree as follows:
SECTION 1. MERGER NOT "GOOD REASON". Xxxxx acknowledges and agrees
that consummation of the Merger in the manner contemplated by the Merger
Agreement (a) will not, by itself, constitute a "change in Xxxxx'x title,
authority, responsibilities, duties or reporting," provided that Parent names
Xxxxx to continue as President and Chief Executive Officer of the Surviving
Corporation pursuant to Section 1.6 of the Merger Agreement, and (b) will
result in the replacement of the outstanding stock options of the Company
with "fully equivalent substitute options," in each case as such phrase is
used in Section 2(e) of the Retention Agreement. Notwithstanding the
foregoing, in consideration of Xxxxx'x covenants and agreements contained in
this Agreement, the parties agree that Xxxxx'x employment with the Surviving
Corporation shall terminate as of the Effective Time of the Merger and Xxxxx
shall be entitled to receive all amounts and benefits (including, without
limitation, the loan forgiveness) that would have been payable to him under
the Retention Agreement as a result of the Merger and a "Termination After a
Change of Control" (as defined in the Retention Agreement), with such
consideration to be allocated to Xxxxx'x covenants contained in Sections 2, 3,
4 and 5 herein in such manner as the parties shall reasonably agree.
SECTION 2. MANAGEMENT CONSULTING SERVICES. Xxxxx agrees for a period
not to exceed 60 days after the Effective Date of the Merger to provide,
upon and conforming to the Surviving Corporation's reasonable requests,
transitional management consulting services (on a full-time or lesser basis,
at the Surviving Corporation's California offices or from his home, as
requested) relating to the business and operations of the Surviving Corporation.
After such 60 days and during the remainder of the one year period after the
Closing Date, Xxxxx agrees to be reasonably available to the Surviving
Corporation for telephonic transitional management consultations concerning the
business and operations of the Surviving Corporation.
SECTION 3. LITIGATION CONSULTING SERVICES. For a period of one year
after the Closing Date, Xxxxx agrees (a) to provide truthful and complete
cooperation including, but not limited to, his appearance at interviews and/or
depositions and at litigation or arbitration hearings, in all regulatory or
litigation/arbitration matters relating to his employment, or areas of
responsibility at the Company and the Surviving Corporation, whether or not
such matters already have been commenced and through the conclusion of such
matters, and including but not limited to the matter entitled XXXXX V. WESTERN
MICRO TECHNOLOGY, INC., ET AL. and all related claims and actions arising from
the facts thereof (collectively, the "Xxxxx Matter"), and (b) to provide
counsel to the Surviving Corporation with all documents in Xxxxx'x possession
or control relating to such regulatory or litigation/arbitration matters.
SECTION 4. INDEMNIFICATION. (a) Xxxxx hereby agrees to indemnify,
defend and hold harmless Parent and the Surviving Corporation (the "Indemnified
Parties") against any and all losses, claims, damages, liabilities, costs,
expenses (including, without limitation, attorneys' fees and other litigation
expenses), judgments and amounts paid in settlement ("Losses") paid by the
Company or the Surviving Corporation after the date hereof in connection with
any actual or threatened claim, action, suit, proceeding or investigation
arising out of or pertaining to the Xxxxx Matter, whether asserted or claimed
prior to, or on or after, the Effective Time; provided, however, that Xxxxx
shall not be obligated to indemnify the Indemnified Parties for the first
$200,000 of such Losses and, provided, further, that Xxxxx'x maximum
indemnification obligation under this Section 4 shall be $500,000.
(b) Xxxxx hereby waives (i) his right to be indemnified pursuant to
Section 4.11(a) of the Merger Agreement or under any agreement with or charter
or by-law provision of the Company or the Surviving Corporation, and (ii) his
right to coverage under the Surviving Corporation's officers' and directors'
liability insurance pursuant to Section 4.11(b) of the Merger Agreement, in
each case to the extent of any Losses arising from the Xxxxx Matter for which
Xxxxx is agreeing to be responsible pursuant to paragraph 4(a) above.
SECTION 5. NONCOMPETITION COVENANT. Xxxxx hereby covenants and agrees
that, for a period of five years after the Effective Date of the Merger, Xxxxx
and his affiliates will not, directly or indirectly, own, manage, operate,
control, participate in, invest in or otherwise be connected in any manner with
(whether as an officer, director, employee, partner, investor, consultant,
lender or otherwise) any business or entity which is engaged in or is
competitive with the businesses being conducted by any of Parent, the Surviving
Corporation or their affiliates as of the date hereof.
SECTION 6. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
California, without regard to the conflict of laws principles thereof.
SECTION 7. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
SAVOIR TECHNOLOGY GROUP, INC.
By: /s/ P. Xxxxx Xxxxx
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Name: X. Xxxxx
Title: Chairman and CEO
/s/ P. Xxxxx Xxxxx
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P. Xxxxx Xxxxx
TACTFUL ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxx
--------------------------
Name: Xxxxx X. Xxxx
Title: President
